Picking the best data for delivering personalized ads

When it comes to digital advertising success, research shows that personalized, relevant ads increase the likelihood that users will engage with a brand, and engagement improves brand favorability and purchase intent. But what kind of data should we use to create personalized ads to drive engagement: first-party, third-party, behavioral, location, demographic, meta, big, small, or something else?

The answer is yes! Yes to all of the above, and that’s the reason why data has become an extremely desirable offering. Recent market activity reinforces the value of data; for example, data reselling, analysis, and onboarding products have been some of the hottest acquisition targets in 2014 so far. Data is highly valued by advertisers and ad tech firms alike, as a standalone product as well as related distribution platforms.

Creating a personalized ad requires a few key tools: data for targeting purposes, creative assets that can be assembled depending on your audience, and a way to pull it all together. Assuming creative build and dynamic ad serving and measurement are taken care of (a pretty big assumption!), let’s dive a little deeper into the types of data available, and how they can be used:

Where does your data come from? Data used straight from the source is called first-party data, and is typically gathered through information provided by a user, or collected by a site. Third-party data usually comes from a data aggregator or reseller.

When will your personalization decisions be made? Some data is used to make media buying decisions, often in conjunction with DMP and/or DSP platforms. Other data is used at the time of ad serving, to refine creative based on information about the viewer on the site or in the app where the ad will be viewed.

What kind of personalization is important to your brand? It is possible to serve an ad based on the viewer’s age, gender, shopping history, internet browsing behavior, and many other variables. One of the most popular ways to create a personalized ad is using location to determine the product, offer, store, or show time communicated to the user. When it comes to location data, there are many sources, including IP geo-location, and cell tower and GPS data for users on mobile devices.

How do you know it’s working? Proving advertising effectiveness is a multistep process, and the first step is getting data in a useful format. Analyzing the results of a personalized campaign cannot be done unless brands know which ads are seen and which audiences see them. The ability to collect and report on creative versions and audience segments is a critical component to the overall effort of understanding if personalized ads are working the way you want.

Advertisers are still experimenting to determine if demographic, behavioral, and location data are all equally influential – that kind of knowledge could make a huge difference for brands telling their stories online. The conversation around personalization in advertising is just beginning, and the industry’s efforts will only improve as we improve our analysis and share findings with each other.